Using a debit card is the most popular way to make purchases among Gen Z according to a new report from Interac, a Canadian interbank network that links financial institutions and other enterprises for the exchange of electronic financial transactions. Seven in 10 Gen Z Canadian adults use debit services regularly, while 6 in 10 prefer to leave their physical wallet at home for short trips in favor of mobile wallet options. 

According to the report, Gen Z's use of mobile wallets outpaces all other generations. Millennials use mobile wallet services 60 percent of the time, followed by Gen X at 44 percent, Baby Boomers at 27 percent and the Silent Generation at 10 percent. 

Nearly two-thirds of Gen X consumers have loaded their debit card on their phone, while 31 percent have taken the steps to set debit as their default payment method. 

"Choosing your default payment method may feel like a small step, but it can play a big role in shaping Canadians' ongoing spending habits," said Glenn Wolff, group head and chief client officer at Interac. "When consumers tap to pay with their phones, the decision to select a card from the digital wallet is easy to miss. Canadians could unintentionally use a default payment method that prompts them to take on more debt. This differs from traditional physical wallets, where the consumer had to select the card they wanted to use each time."

The company noted that two-thirds of Gen Z consumers want to be more mindful when spending, and more than half say they want the option to use debit when paying in store or online. Nearly 80 percent of Gen Z respondents said the cost of living has become too high, with 59 percent noting this has altered their spending habits. More than half reported they are developing new habits to stay in control of their finances, and 56 percent reported they are setting a timeline of September to put these new habits into play. 

Interac noted that last year, family clothing stores saw almost twice as many debit mobile purchases in September and October compared to earlier that year in January and February. 

"As their expenses increase going into the fall, younger Canadians are focused on making their money go further. This generation is among the worst hit by cost-of-living pressures, and it's no wonder that they see the value of Interac Debit as a smart and controlled approach to digital spending," added Wolff.